8 in 10 family businesses likely to create jobs with support from political & economic environment
Report reveals taxation is the main concern of family firms who have mixed views on the future of work
16th September 2021 – 80% of family owned-businesses in Ireland are likely to create new jobs in the next twelve months if there is a supportive political and economic environment, according to the National Family Business Sentiment Report 2021 unveiled today by The Family Business Network and leading advisor to family businesses, Smith & Williamson.
The second annual report provides an insight into the current sentiment of family business owners who employ nearly a million people across Ireland and the obstacles facing Irish indigenous businesses as they look to fuel a jobs-led recovery.
Despite the cost of Brexit and ongoing supply chain issues, 60% of Irish family-run businesses are feeling more optimistic about their ability to do business and hire new employees compared to three months ago. 80% are likely to create new jobs within the coming year, up from 60% recorded in the first report published in November of last year.
With the indigenous family-owned sector bearing the brunt of exceptional disruptions in the past 18 months, the vast majority (85%) of family businesses also say that stimulating and growing the economy is the best approach in funding the cost of navigating the COVID-19 pandemic.
Taxation was ranked as the number one concern of the indigenous family-owned sector, with high levels of Capital Gains Tax (CGT) and the Capital Acquisitions Tax (CAT) proving to be key obstacles to growth. Only family businesses face a need to sell off parts of their business when transitioning management to the next generation. Continuing Government supports for family businesses and the cost of business insurance were ranked the second and third greatest concern.
Family firms have mixed views on the future of the workplace environment, with 41% planning for a full return and another 41% anticipating a hybrid model.
Commenting on the findings of the report, John McGrane, Executive Director, Family Business Network said: “We’re delighted to present the findings of the National Family Business Sentiment Report 2021. It’s clear from the report that family-run businesses are eager to play their role in supporting a jobs-led recovery that Ireland needs right now. Family firms want to hire more people, invest and support both their local and national economies.
“But this growth is contingent on a policy and economic environment which nurtures and supports home-grown family firms. Targeted reforms to Capital Gains Tax would help unlock investment in family-owned businesses and remove the threat of families being forced to sell key parts of their business as it passes from one generation to the next. With Ireland’s FDI friendly tax policies under pressure, Government will depend on family-owned businesses to deliver Ireland's ambition of having 2.5m at work by 2024.”
Con Casey, Director, Smith & Williamson said: “Family Businesses are at the heart of our economy and we see the National Family Business Sentiment Report 2021 as a key touchpoint in understanding their challenges. The report truly highlights how vital local employers are to the Irish economy. Family business owners need support as they face serious disruption from the pandemic, the aftershocks of Brexit and inflationary pressures in the costs of doing business, undermining Ireland’s competitiveness.
“Many family business owners have stayed in their business, not wanting to hand over to the next generation until Ireland’s economy has stabilised. We hope that this report can help re-mobilise these vital businesses for growth and help Ireland efficiently move forward to renewed economic and cultural vibrancy.”
The National Family Business Sentiment Report 2021 features insights from approximately 100 micro-enterprises, SMEs, and large enterprises from a wide range of industries within the family business sector.
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Note to Editors:
About Family Business Network Ireland
Family Business Network Ireland is the Irish Chapter of the International Family Business Network. It was founded in 2013 by leading Irish business families and operates as an all-island organisation. It is estimated that indigenous Irish businesses, the majority of which are family-owned, contribute 80% of Ireland’s economic value and employ nearly a million people – more than the State and foreign business combined.
The purpose of the Family Business Network is to promote the success and sustainability of Family Businesses in the Irish economy and communities nationwide. It is a not for profit and non-solicitation organisation that provides a confidential forum for families to discuss and address challenges specific to family businesses. The organization also provides advice on corporate governance and business structures along with assistance on succession planning.
About Smith & Williamson
Smith & Williamson has been managing the financial affairs of private clients and their business interests for over a century. Smith & Williamson first entered the Irish market in 2008 through the establishment of a Tax and Business Services division following a merger with Oliver Freaney & Co, itself established in 1958 and one of Ireland’s leading firms of chartered accountants and business and tax advisers. In April 2011, the firm's existing Irish services were expanded with the launch of full-service investment management and retirement planning capabilities. Smith & Williamson currently employs over 120 people in Ireland. In Ireland Smith & Williamson has offices in Sandyford, Dublin City Centre and Belfast.